Not a total loss

She thought it would be a beautiful addition to downtown Petoskey, but now, Sally McKenzie of Harbor Springs is relieved she didn't buy into it.

The 82-year-old widow, who is currently living off social security and private investments, said she first became interested in purchasing a condominium worth nearly $300,000 at Petoskey Pointe in May of 2005.

"I was so glad when (the project) started. It was such a bad block - it was ugly - and I thought, what a step forward for the city," McKenzie said. "I thought it would be a vibrant place to live, in the heart of the city."

In July of 2007, however, McKenzie's excitement wore off after a meeting with Greg Andrews, buyers agent for Kidd & Leavy Real Estate, left her questioning the stability of the project.

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"He (Andrews) was very nice and pleasant, but he wasn't trying really hard to sell me on (the condominium)," McKenzie said. "It was funny for him not to come on strong … He wasn't in any hurry to sew up a deal. I think I might have gone further if I got better feedback from him."

Wally Kidd, broker and owner of Kidd & Leavy, said his real estate agency, which acted as sales agent for the Petoskey Pointe properties from 2005 to 2007, terminated its sales arrangement with developers in fall of 2007.

"We knew that the world changed; the economy changed; the viability of money changed - it didn't just start happening last week," Kidd said. "The reason that our arrangement changed with the developer is they wanted 100 percent of our time, and we couldn't devote that time.

"We've talked with the developers - we're still supportive of the developers."

Those developers told city officials earlier this week that a new lender has been secured for the project, and that work likely can resume soon at the Petoskey Pointe site.

McKenzie said, although those around her supported the potential purchase of a condominium at Petoskey Pointe, she said she is relieved that she turned away from the investment.

"People had told me, 'Oh, that's wonderful. Go ahead with it. You should do it.' I didn't follow their directions - I'm glad I didn't do it," she said. "I was hesitating myself because, heck, there wasn't anything there to look at. You see all these slick pictures … but I was very careful, and at the last moment, I just decided I wanted to see more of it constructed.

"I'm sad for everybody. I hope people aren't left in a lurch."

Petoskey Pointe developer David Jankowski, owner of Janko Properties, said "no one has lost anything," on their investments.

He said, each person who secured a condominium had a purchase agreement, which required a down payment of $25,000 or 7 percent of the gross price. To date, Jankowski said, those who have withdrawn from a purchase agreement have had their entire investment returned.

"… We didn't want to cause any ruckus," he said.

According to Andrews, at one point, Kidd & Leavy had pre-sold between 43-45 percent of Petoskey Pointe's condominiums through purchase agreements.

"It's pretty darn good for a property that hasn't been constructed," Andrews said. "At that point, developers are trying to garner financing."

Kidd confirmed Andrews' point by saying there was a time when their agency had sold about half of the 168 condominiums available. Currently, he will not comment on how many people have backed out of those initial agreements, however, he said there is still reason to be optimistic.

"I still have binding purchase agreements - people are still holding in there," Kidd said. "There's still a lot of confidence for the proposal - there's still people who want to live there."

Jankowski said the project's financial roadblocks have had nothing to do with the pre-sale of condominiums.

"We had enough (condominium pre-sales) … but it kept changing. The real problem was that National City Bank was in trouble and they wanted out … we had a majority of the retail taken up, and everything was in place, and then one of their participants basically went bye-bye because they saw this condo crunch coming," he said. "National City Bank realized they couldn't do the financing themselves - the deal was too big for them."

National City responded to this with the following statement: "National City does not comment on customer information as a matter of policy. Our bank has enjoyed a successful tradition of support to our Northern Michigan communities. The PNC (Pittsburgh National Corp.) transaction will result in a combined company with greater scale and scope, enhancing services to our customers and communities."

National City is in the process of being purchased by PNC Financial Services Group Inc.

Kidd said he still believes there is a possibility that the project will move forward.

"… We haven't given up hope yet," he said. "Nobody wants to see that hole filled in more than us. Nobody wants to jeopardize the current developer's project - the best chance to get that hole filled in is the current developer."